In New York, an employer’s policy or practice of refusing to consider hiring all unemployed persons is lawful if it is implemented at the pre-interview stage. That is, an employer does not violate federal or New York State law by refusing to invite any job applicants who are not currently employed to interview for the available position(s).

However, if an employer in New York invites job applicants to interview for available jobs without regard to whether the applicants are presently working, asks interviewees whether they are employed, and then rejects the interviewees who respond that they are not employed, that employer risks violating both federal and New York State laws. Further, an employer’s refusal to entertain job applications by unemployed people may be fiscally imprudent.

In general, employment in New York State is at-will. An employer in New York may decline to hire a worker for any reason or no reason, except for a reason barred by statute or by public policy. The public policy exclusion from at-will employment in New York is a narrow one.

Consequently, an employer in New York may refuse to invite any job applicants who are not currently working to interview for open positions. An unemployed job applicant’s resume is unlikely to explain why the applicant is not currently working. So there is little risk that a court will find that an employer’s policy, implemented at the pre-interview stage, of refusing to entertain job applications by unemployed people is motivated by a statutorily prohibited purpose.

However, if an employer in New York invites job candidates to interview for open positions without regard to whether the candidates are presently employed, asks interviewees whether they are working, and then rejects the interviewees who reply that they are not working, that employer risks violating both Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. §§ 2000e etseq. (“Title VII”) and the New York Executive Law. This is the case because, in an interview, an unemployed job applicant is likely to volunteer why he or she is unemployed. The reason for the job applicant’s lack of gainful employment, in turn, may be a reason which federal or state law restricts a business from considering in determining whether to make an offer of employment.

Likewise, at an employment interview in New York State, an out-of-work job candidate may inform the company’s interviewer that he is not working because he recently completed a prison term. Should the company then decline to hire the job candidate because he is not working, the candidate could allege that the company is unreasonably discriminating against him because of his criminal conviction(s) in contravention of N.Y. Correction Law § 752.

N.Y. Correction Law § 752 prohibits an employer from firing or refusing to hire an individual because he has been convicted of one or more crimes, unless (1) “there is a direct relationship between one or more of the previous criminal offenses and the specific . . . employment held by the individual; or (2) . . . the granting or continuation of the employment would involve an unreasonable risk to property or to the safety or welfare of specific individuals or the general public.” For a more detailed discussion of N.Y. Correction Law § 752, see this author’s prior post on that statute, which post is linked here.

Moreover, it may be fiscally unwise for a business in New York to refuse to consider hiring all out-of-work individuals. This is the case for at least two reasons. First, individuals who are not employed may be willing to settle for a lower salary than job-switchers. Second, as this author has explained in two previous posts, linked here and here, a recently enacted federal law, the federal Hiring Incentives to Restore Employment Act, P.L. 111-147 (the “HIRE Act”), gives employers financial incentives to hire and retain unemployed persons.

Section 101 of the HIRE Act exempts an employer from paying the employer’s portion of Social Security payroll taxes (6.2% of the first $108,000 of wages) for wages paid in 2010 for any new worker hired after February 3, 2010 and before January 1, 2011, if the new worker (1) has been unemployed for the past 60 days and (2) is not hired by the employer to replace another employee, unless that other employee quit voluntarily or was fired for good reason. In addition, for each new worker who had been unemployed for the past 60 days whom an employer employs continuously for at least 52 weeks, section 102 of the Act grants the employer an income tax credit for 2011 of the lesser of (1) $1,000 or (2) 6.2% of the new worker’s annual wages.

A business in New York or elsewhere which refuses to consider hiring the unemployed will not reap the benefits of the HIRE Act.

It should be noted that it is difficult for a job candidate who is not offered employment to win a lawsuit alleging a discriminatory failure to hire. Because the thwarted job candidate has never worked for the defendant company, that job candidate has accomplished nothing at the company, and has received no positive performance reviews at the company. In turn, because the job candidate lacks a track record at the defendant company, it is hard for the candidate to show that the company’s proffered, non-discriminatory reason for deciding not to hire the candidate was false or a pretext for discrimination.

So, too, it should be noted that a disappointed job candidate who brings a lawsuit claiming a discriminatory failure to hire may well be hampered by the difficulty of proving compensatory damages. Because the unsuccessful job candidate was never employed by the defendant company, it is hard for the job candidate to prove that, had he been hired, he would have worked for the company for many years. However, this blog post addresses the circumstances under which an employer’s refusal to consider hiring all unemployed persons is legally permissible, not the likelihood that an unemployed person could recover substantial damages in a lawsuit based on that refusal.

If your company needs assistance or guidance on a labor or employment law issue and your company is located in the New York City area, call Attorney David S. Rich at (212) 209-3972.